Americans may have largely forgotten about Russia in the years since the collapse of the Soviet Union, but Russians have scarcely forgotten about America. They never got the chance. Americans dominated the claque of foreign interests that set about remaking the Russian economy for its post-Communist adventure in market reforms, and the US-waged war in the Middle East complicates Russia’s international position in countless ways.

As Vladimir Putin steers the new capitalist Russia in an increasingly fascist direction, David Schultz discovered on a recent week-long visit to Moscow that political observers there are watching the 2008 US elections with avid interest and abundant dread. "It was very clear they would love to see Barack Obama elected," he says in a special Friday edition of the Schultz Report. "Their reason is that they would like to see somebody with a greater sense of diplomacy. They’re hoping for somebody who won’t just be threatening to shoot everybody, to go to military means to solve every problem in the world. Part of that may be their fear that the United States is a lot stronger than Russia now. But there’s also a genuine interest in diplomatic solutions to the world’s problems.

David Schultz"But they’re also convinced that the United States will not elect Barack Obama this fall. They’re convinced we’ll never elect a mixed-race candidate. So they’re fully prepared at this point for John McCain to be elected. They think he will be. And they view McCain as no different from George Bush in terms of approach to foreign policy and the use of military means as opposed to diplomacy. They see the United States continuing the pattern that will elect yet another pro-military–they described it as pro-aggression–candidate to the presidency.

"They were at first completely surprised that a mixed-race candidate such as Obama would get as far as he did, which is why they were trying to understand our selection process. They said, there’s a clear racial dimension to your country; you’ve got racial problems in your criminal justice system, your death penalty, your gaps in rich and poor. They said, there’s no question your country has very powerful racist tendencies. And given that, they couldn’t understand how Barack Obama got as far as he did in the Democratic party. They view [the election] as coming down solely to race in the United States–not issues or politics.

Besides the elections, Schultz and I also discuss the state of political and civil freedoms in contemporary Russia, and the radical transformation of the city of Moscow itself by a mammoth influx of oil money and Western finance capital. "Many people probably have an image of Moscow as a dingy city with cheap Russian architecture–not a wealthy city," he notes. "The way I’ve been describing [my visit to] Moscow is to say it reminds me of New York City on steroids. Moscow right now, by most accounts, is along with Oslo one of the two most expensive cities in the world. It’s really a matter of two factors–the incredible amount of money coming from Russian oil and natural gas. Just billions and billions of dollars. And with that, all the Western banks have moved into Russia.

"When you look around the city, what’s amazing is that you have Red Square and the Kremlin, which has that sort of quaint, classical architecture with the onion domes that everybody has seen on postcards or television. Once you get away from that, what you have in the center of Moscow is a city where all the old architecture’s being torn down, and around it 40-story office buildings are going up everywhere, along with banks, high-end restaurants, and very, very expensive and beautiful condominiums. [Central] Moscow itself is very wealthy and very congested with Mercedes-Benzes, Lexuses, BMWs–top-of-the-line cars everywhere. It’s really quite remarkable. People who visited Moscow 10 years ago wouldn’t recognize it now.

"On one level, you’ve got incredible amounts of success as a result of market reforms. But there’s no question that with those market reforms, a lot of people aren’t making out well. Outside of Moscow, poverty is pretty high. And even on the perimeter of Moscow–that’s where the people are. Unlike in the United States, where we put the poor in center cities, in European cities the center cities are where the rich live.

"What was most interesting at this conference was listening to a lot of economists discuss what’s going on in Russia. There were times I thought they were actually talking about the United States. At what they call the regional government level, which is their equivalent of our states, they were talking about the problem of the national government passing laws and requiring these regional governments to act on them without giving them any money. We call that unfunded mandates. And in the city governments, they were complaining that the regional governments were adopting unfunded mandates and pushing them down to the cities. So the problem there is the same [as here].

"They were also talking about how the health insurance coverage in Russia wasn’t covering anybody, or the health insurance companies were refusing to pay on claims. They also discussed concerns that pharmaceutical companies were charging people too much and ripping them off. I also heard some economists talk about the growing gap between rich and poor in Moscow and around Russia, and how not enough was being done by the government to regulate product safety and food safety.

"Part of what I walked away from the conference with was that there were parallels between the US and Russia on many issues, and how, as a result of market reforms, they’ve picked up some of the worst aspects of the free market. To an extent I don’t think the people there would expect, I walked away thinking about how much the United States and Russia had sort of grown together in the similar problems they were confronting."

Listen: David Schultz on the Russian view of Election ‘08 and the new face of Moscow (27:47)